October 21, 2015, Geneva, Switzerland – Etrion Corporation (“Etrion” or the
“Company”) (TSX: ETX / OMX: ETX), a solar independent power producer, announces
an operations update and preliminary production results for the three months
ended September 30, 2015.
Italian Solar Assets
During the third quarter of 2015, Etrion’s 100%-owned 60-megawatt (“MW”) solar
portfolio in Italy produced approximately 34.6 million kilowatt-hours (“kWh”) of
electricity, similar to the comparable period in 2014.
Etrion’s Italian solar parks receive the weighted average feed-in-tariff (“FiT”)
of approximately EUR 0.30 per kWh plus the spot price for each kWh of
electricity produced. In the third quarter of 2015, the Italian spot price
averaged EUR 0.06 per kWh in July, EUR 0.05 per kWh in August and approximately
EUR 0.05 per kWh in September.
Etrion recently executed new operations and maintenance (“O&M”) contracts with
SMA Solar Technology AG (“SMA”) for the Etrion Lazio and Sagittario projects in
Lazio, Italy, representing a total capacity of 7.9 MW. The Etrion Lazio and
Sagittario solar parks were built by Phoenix Solar AG (“Phoenix Solar”).
Effective October 1, 2015, Etrion has renegotiated the O&M contracts with SMA,
which acquired Phoenix Solar’s O&M business, to reduce the annual fee by
approximately 35% and to increase the level of service.
Etrion previously announced the renegotiation of its O&M contracts in Italy with
ABB and SunPower, representing a total capacity of 52.2 MW. Together with the
new SMA O&M contracts, this initiative reduces expected O&M expenses for the 60
MW Italian solar portfolio by approximately US$1.6 million per year while
securing a higher level of service.
Chilean Solar Assets
During the third quarter of 2015, Etrion’s 70%-owned 70 MW Salvador solar power
plant in northern Chile (“Project Salvador”) produced approximately 36.5 million
kWh of electricity, below expectations due to lower than expected solar
Project Salvador began operations in January 2015 and is currently operating on
a merchant basis where the electricity produced is sold on the spot market and
delivered to the Sistema Interconectado Central (“SIC”) electricity network. As
previously announced, Project Salvador executed a long-term power purchase
agreement (“PPA”) with EE-ERNC-1, an investment grade off-taker. The PPA is for
approximately 35% of Project Salvador’s production for 15 years starting January
1, 2016, at approximately US$0.10 per kWh. Project Salvador is seeking
additional PPAs to secure its long-term revenues.
The spot prices in the SIC electricity network in Chile were unusually low
during the third quarter of 2015 due to a combination of local grid congestion,
increasing solar and wind electricity generation, strong hydro electricity
production due to wet winter conditions and low electricity demand because of
depressed mining activity as a result of the collapse in commodity prices. The
average spot price received by Project Salvador in the third quarter of 2015 was
approximately US$0.04 per kWh in July, US$0.02 per kWh in August and US$0.02 per
kWh in September.
In September 2015, Project Salvador drew down an additional US$13.8 million
tranche of non-recourse debt from the Overseas Private Investment Corporation
(“OPIC”) in order to meet its debt service obligations and avoid additional
equity requirements if the spot electricity price continues to be lower than the
original bank case projections. Spot prices are expected to stabilize to the
long-term projections by 2017 when the Sistema Interconectado del Norte Grande
(“SING”) and SIC electricity networks are scheduled to be connected and the SIC
network expansion is expected to be completed.
Japanese Solar Assets
In the third quarter of 2015, as previously announced, Etrion completed
construction of its 87%-owned 9.3 MW Mito solar project in the Ibaraki
Prefecture of Japan. All five sites of the Mito cluster have been operational
since August, producing a total of approximately 2.6 million kWh of electricity
during the third quarter of 2015. Under the Japanese FiT program, the Mito
project has a 20-year PPA with Tokyo Electric Power Company (“TEPCO”) whereby
the project receives ¥40 per kWh of electricity produced.
Etrion’s 87%-owned 24.7 MW Shizukuishi solar project is under construction on
one site in the Iwate Prefecture of Japan. The Shizukuishi project is fully
funded, on schedule and is expected to be operational by the third quarter of
2016. The Shizukuishi project has a 20-year PPA with the Tohoku Electric Power
utility at ¥40 per kWh.
Etrion Corporation is an independent power producer that develops, builds, owns
and operates utility-scale solar power generation plants. The Company owns 139
MW of installed solar capacity in Italy, Chile and Japan. Etrion has a 25 MW
solar project under construction in Japan and is also actively developing
greenfield solar power projects in Japan and Chile. The Company is listed on the
Toronto Stock Exchange in Canada and the NASDAQ OMX Stockholm exchange in Sweden
under ticker symbol “ETX”. Etrion’s largest shareholder is the Lundin family,
which owns approximately 24% of the Company’s shares directly and through
For additional information, please visit the Company’s website at www.etrion.com
Pamela Chouamier – Investor Relations
Telephone: +41 (22) 715 20 90
Note: The capacity of power plants in this release is described in approximate
megawatts on a direct current (“DC”) basis, also referred to as megawatt-peak
Etrion discloses the information provided herein pursuant to the Swedish
Securities Market Act. The information was submitted for publication at 08:05
Central European Time (CET) on October 21, 2015.
This press release contains certain “forward-looking information”. All
statements, other than statements of historical fact, that address activities,
events or developments that Etrion believes, expects or anticipates will or may
occur in the future (including, without limitation, statements relating to
expected reductions in O&M expenses for Etrion’s Italian solar portfolio, the
expected stabilization of spot electricity prices in Chile and the anticipated
timing for the Shizukuishi project to become operational). This forward-looking
information reflects the current expectations or beliefs of Etrion based on
information currently available to it as well as certain assumptions (including
assumptions as to the impact of the renegotiated O&M contracts for the Italian
solar portfolio, that the SING and SIC networks will be connected and the SIC
network expansion will be completed on schedule and that the Shizukuishi project
will also become operational on schedule). Forward-looking information is
subject to a number of significant risks and uncertainties and other factors
that may cause actual results to differ materially from those discussed in the
forward-looking information, and even if such actual results are realized or
substantially realized, there can be no assurance that they will have the
expected consequences to, or effects on, Etrion. Factors that could cause actual
results or events to differ materially from current expectations include, but
are not limited to, the risks that the reduction in O&M expenses for Etrion’s
Italian solar portfolio will be less than anticipated, the proposed connection
of SING and SIC networks and the proposed SIC network expansion will not be
completed on schedule, spot electricity prices in Chile will not stabilize as
anticipated and the completion of the Shizukuishi project will be delayed.
Any forward-looking information speaks only as of the date on which it is made
and, except as may be required by applicable securities laws, Etrion disclaims
any intent or obligation to update any forward-looking information, whether as a
result of new information, future events or results or otherwise. Although
Etrion believes that the assumptions inherent in the forward-looking information
are reasonable, forward-looking information is not a guarantee of future
performance and accordingly undue reliance should not be put on such information
due to the inherent uncertainty thereof.